Senior member of the Georgetown Chamber of Commerce and Industry (GCCI) Timothy Tucker says several of the factors that constitute what a local business is should be strengthened in the context of Guyana’s revised draft local content policy and the Chamber has made recommendations to the Ministry of Natural Resources in this regard.
“We have said to the Ministry of Natural Resources that they need to strengthen that definition… It also has to go back to 8901 which is the Incorporations Act where that needs to be strengthened in terms of how you register your business in Guyana, where is your registered office, when a registered office is in Guyana, where your board meetings are to be held, what percentage of your profit must stay in the country,” he stated on a local content webinar hosted on Sunday by OilNOW.
He said the policy should incorporate a ‘test of locality’ where authorities can look closely at the companies operating in the industry and make a determination on whether or not the bulk of the benefits remain in Guyana or are being taken out of the country.
“If you have a local content commission, the local content commission would be the secretariat that is tasked with doing that 24 hours a day, 365 days a year where they look at all the businesses doing business and make sure that we are not being hoodwinked in this country, that we are indeed having true local content because it makes no sense that we are trying to force local content and not being really benefited from it,” he pointed out.
Tucker said special attention must be placed on ensuring that ‘storefronts’ are not set up merely to meet the requirements of a ‘local company’ with 51% Guyanese ownership but where the foreign partner has all the voting rights with 90% of the staff overseas.
“In my MoU, I’ve signed my voting rights over to my 40 something percent partner. I agree that I will give him 95% of the profits and I will collect a salary and I will collect 5% of the profits,” he said, in providing an example. “Now, just to have a storefront I have to do nothing. I just have to go and shake a few hands and say that the company is Guyanese. That is window dressing and we’ve seen that already.”
Tucker, who recently served as the Chamber’s Vice President and is likely to emerge as the new President this week when the newly elected council members vote, said while storefronts are not yet that prevalent, there have been instances of this in several sectors, including oil and gas.
“And there are lots of people that go through that that don’t read and don’t take the time to say, “Let’s take this to a lawyer”, you know? They’re happy that they’re getting a big partner. They sign the MoU and they really don’t read the MoU,” he pointed out. “So, you know, those are the things that we generally have to be careful of and that we’re not being used or present ourselves as window dressing.”